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Financial Education

Financial Education/College Investment

Planning for College Finances

Arrowroot Family Office recognizes the importance of a college education, but understands that the financial burden can be gruesome for some families. Yes, college is expensive and the cost is constantly increasing. However, there are certain investment plans and strategies that can make paying for college in the future easier.

Investment Vehicles Designed for Education


There are a number of choices available for those seeking tax-efficient accounts specific to education. These include the TD Ameritrade 529 College Savings Plan, Covered Education Savings accounts, and UGMA/UTMA Custodial accounts.


Other Savings Plans


529 Plans:


Sponsored by individual states, these college savings plans offer a level of flexibility and potential tax advantages that can make them a great choice for the right investor. Benefits of a 529 plan vary from state to state. Details of the TD America 529 College Savings Plan include:


  • The account owner maintains control over the account even if the beneficiary decides not to go to college
  • Allocate assets based on risk tolerance or child’s age
  • Contribute $400,000 in a lifetime per beneficiary
  • Contribution and earnings grow federal tax-deferred and funds withdrawn for qualified higher education expenses are completely free from federal income taxes
  • Some states may offer tax benefits to in-state residents
  • Invest as much as $15,000 per year per child, or $75,000 in a single year, without incurring federal gift taxes


Coverdell Education Savings Account:


These accounts offer federal tax-free earnings and are withdrawn on qualified expenses such as tuition, books, computers, and room & board. While 529 Plans are used exclusively for college, Coverdell Education Savings Accounts (ESAs) can be used for elementary and secondary schooling in addition to college. Additionally, there are no minimum contributions and account owners can contribute up to $2,000 per child per year. 

UGMA/UTMA Custodial Accounts:


Custodial accounts provide a way to build assets for your children or loved ones’ future, and let you manage a minor’s assets for their benefit. As you build a portfolio, with or without assets from the minor, you will be the guardian of the account, managing it until the minor reaches the age of majority. From the start, the account will be held under the minor’s name and Social Number. Once they are old enough, they will assume control of all assets.


There are many different options to choose from when planning to save for college, which can become confusing and overwhelming. It is also hard to tell which one is right for you without the help of a professional. Arrowroot has many advisors who are experts in this area and will help you come up with a plan specific to you and your family. 


Do not wait until it is too late! Reach out to us now to establish your plan because saving money takes time.